Former Bear Hedge Fund Managers Settle For $1 Million

Feb 14 2012 | 12:44pm ET

The Securities and Exchange Commission has settled fraud allegations against two former Bear Stearns hedge fund managers for "chump change."

The deal, which a federal judge said yesterday he was "inclined to sign off on," ends the more than four-year drama of Ralph Cioffi and Matthew Tannin, who ran two Bear hedge funds that collapsed in 2007, costing investors some $1.6 billion. A year later, the two men were indicted on criminal charges that they misled investors in the Bear Stearns High-Grade Structured Credit Fund and a more highly-levered sister fund, among the first casualties of the credit crisis. But Cioffi and Tannin were acquitted by a jury in 2009, although the SEC had pledged to continue its own civil case against the men, filed at the same time as their indictment.

That effort all but ended today, with Cioffi agreeing to pay $800,000 and Tannin $250,000. The two men also agreed to temporary banishments from the securities industry, with Cioffi agreeing to a three-year ban and Tannin two years. But neither will admit any wrongdoing.

Despite offering somewhat harsh words for the pact—"This case is being settled for, relatively speaking, chump change"—and a request for more filings by both sides next week, U.S. District Judge Frederic Block said he'd likely approve the accord. Block was scheduled to preside over the civil trial, which would have begun today.

An SEC spokesman disagreed with Block's characterization of the deal, saying that Cioffi and Tannin had been hit with "serious sanctions." Cioffi will pay $700,000 in disgorgement and a $100,00 fine, and Tannin $200,000 in disgorgement and a $50,000 fine.


In Depth

Hedge Fund Veteran Peter Borish Talks Trading

Dec 17 2014 | 9:32am ET

Peter Borish says 2014 was “tricky” from a trading perspective. “The best...

Lifestyle

Cohen Donates $1.5M To GOP Governors Association

Dec 10 2014 | 7:13am ET

The Republican Governors Association raised close to $25 million from October 1...

Guest Contributor

Q&A With Daniel Gallancy: Institutional Interest In Bitcoin Is Growing Steadily

Dec 12 2014 | 7:54am ET

Daniel Gallancy is founder and CEO of SolidX, a provider of total return swaps for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.